Early Distribution

An early distribution is generally any withdrawal from a retirement account made before the taxpayer reaches 59 1/2. The amount of the early distribution may be subject to a 10% additional tax penalty.

Earned Income

Earned income is income derived from active participation in a trade or business, including wages, salaries, tips, commissions and bonuses. It includes and income that the taxpayer receives for work that they have done.

Earned Income Tax Credit (EITC or EIC)

Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate income working individuals and families. When EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

Economic Recovery Payment

A $250 Economic Recovery Payment was automatically paid to recipients of certain benefits paid by the Social Security Administration, Department of Veteran's Affairs and the Railroad Retirement Board in 2009 or 2010. This amount should have been reported on Schedule M in the year that it was received.

Elective Deferrals

Elective Deferrals are amounts contributed to a retirement plan by an employer at the employee's election. Elective deferrals are excludable from the employee's gross income except to the extent that they are designated Roth contributions. Elective deferrals include deferrals under a 401(k), 403(b), SARSEP and SIMPLE IRA plan.

Electronic Federal Tax Payment System (EFTPS)

The Electronic Federal Tax Payment System (EFTPS) is a free service provided by the U.S. Department of Treasury through which federal taxes can be paid electronically. Taxes can be paid via the internet, by phone or through a service provider.

Electronic Postmark

The Electronic Postmark is the date and time the Transmitter first receives an electronic return on its host computer in the Transmitter's time zone. The time is adjusted to the taxpayer's time zone to determine timeliness.

Electronic Refund Check (ERC)

An electronic refund check, or ERC, is a bank product type in which you print a check for the balance of the taxpayer's refund after the IRS deposits their refund (10-14 days after the return is accepted) and the bank deposits your fees into your account.

Electronic Refund Deposit (ERD)

An ERD is a bank product in which the taxpayer elects to have his/her refund deposited into their personal bank account. Preparer's fees will be deducted from the refund prior to the deposit being made. An ERD may also been known as a Pass-Thru.

Electronic Return Originator (ERO)

Electronic Signature

An electronic signature is a method of signing a tax return through the use of a Personal Identification Number (PIN). Form 8879 is required to be filled out and maintained by the ERO for an e-filed return when the electronic signature method is used.

Electronic Transmitter Identification Number (ETIN)

Electronically Transmitted Documents (ETD)

A system created to process electronic documents that a Provider does not attach to a tax return and that is filed separately from the tax return. (Form 4868, Application for Extension of Time to File, for example).

Employer Identification Number (EIN)

Employer Shared Responsibility Payment (ESRP)

The Affordable Care Act requires certain employers with at least 50 full-time employees (or equivalents) to offer health insurance coverage to its full-time employees (and their dependents) that meets certain minimum standards set by the Affordable Care Act or to make a tax payment called the Employer Shared Responsibility Payment (ESRP).

Enrolled Agent

An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee.

Error Reject Code (ERC)

An Error Reject Code (ERC) is a code included on an Acknowledgement Report (ACK) for tax returns that were rejected by the IRS. The IRS publishes these reject codes in Publication 1346, Electronic Return File Specifications and Record Layouts for Individual Income Tax Returns.

Estate Tax

Estate Tax is a tax imposed on a beneficiary's portion of an estate when the value of the estate exceeds the exclusion limit set by law. The estate tax does not apply to the transfer of assets to a surviving spouse.

Estimated Tax Payments

Estimated Tax Payments are required advanced payments of current tax liability based either on wage withholdings or installment payments of a taxpayer's estimated tax liability. To avoid penalties, a taxpayer generally must pay to the IRS either 90% of their final tax liability, or either 100% or 110% of the prior year's tax liability, depending on their adjusted gross income.

Excess Benefit

Excess benefit in regards to a 990 exempt organization generally means the excess of the economic benefit received from the applicable organization over the consideration given by a disqualified person.